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Sundial, Inc., produces two models of sunglasses: AU and NZ. The sunglasses have the following characteristics: AU NZ Selling price per unit $ 460 $
Sundial, Inc., produces two models of sunglasses: AU and NZ. The sunglasses have the following characteristics:
AU | NZ | |||||
Selling price per unit | $ | 460 | $ | 460 | ||
Variable cost per unit | $ | 240 | $ | 200 | ||
Expected units sold per year | 60,000 | 40,000 | ||||
The total fixed costs per year for the company are $13,452,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
c. If the product sales mix were to change to four pairs of AU sunglasses for each pair of NZ sunglasses, what would be the new break-even volume for Sundial, Inc.?
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